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FUNCTIONAL STRATEGIES
Definition
Functional strategy is the approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity
 It is concerned with developing a distinctive competence to provide a company or business unit with a competitive advantage.
Eg:
A multi-dimensional company has several business units.
Each unit has its own business strategy
Each unit has it own set of depts.
 The orientation of functional strategy is dictated by its Parent business unit’s strategy.
Eg:
A mfg functional strategy that emphasizes on an ‘expensive,quality assurance’ process over ‘cheaper,high volume’ production.
A H.R functional strategy which stresses on hiring and training high skilled but costly workforce.KEY GOALS
 To achieve corporate and business unit objectives and strategies by maximizing resource productivity.
 To develop a distinctive competence to provide the company with competitive advantage.FUNCTIONAL STRATEGY OBJECTIVES
 Profitability
 Market share
 Human talent
 Financial health
 Cost efficiency
 Product quality
 Innovation
 Social responsibilityTYPES OF FUNCTIONAL STRATEGIES
 Marketing Strategy
 R&D Strategy
 HRM Strategy
 Financial Strategy
 Information Management StrategyMARKETING STRATEGY
 Deals with pricing,distributing and selling a product.
 Here the company uses two types of strategies namely 1.Market development: where the company or its unit captures a larger market share of an existing market.
Eg: Unilever, Colgate-Palmolive
Firstly these companies are experts in advertising and promotion to implement strategies
Secondly they extend PLC by introducing “new and improved” variations of the product.2. Product development:
They develop new products for existing markets
They develop new products for new markets
Eg: Gujarat Co-operative milk marketing federation developed new products to sell to its existing customers,then through Amul it introduced Ice-creams and Desserts,Health drinks etc.
[Can be called as Line extension]OTHER MARKETING STRATEGIES
Distribution System
1. Should the company sell directly to mass merchandisers?
2. Should the company use distributors and dealers to sell its products?
Eg: John Deree [sells tractors and lawn movers] opted for both mass merchandisers and dealers.